Graduating from college and beginning the process of building your career is one of the most exciting transitional periods of many people’s lives. As you begin to search for work, you may find yourself thinking about the future of their financial situation. Some questions you might be asking yourself could include:
- How long will it take me to pay off my student loans?
- Will I be able to find a stable job with my degree?
Because many of these questions don’t have an immediate answer, lots of students are left feeling anxious about having their money in line. However, there are a lot of great, immediate actions that you can take fresh out of college to help you prepare for a successful financial future.
Get a Part-Time Job
In the months after you graduate college, your first instinct is probably to look for a job within the field that you studied. While this is a great initiative to take, many of these positions have stricter requirements to get hired at them. Therefore, it may take a long time before you find a job that really suits your career interests and will also hire you.
While you’re job hunting for a career within your field, you can still use this time to start working at a part-time job or perform freelance gigs. By doing this, you will have the opportunity to start generating some income for yourself until you get a full-time job. When you’ve already established some cash-flow for yourself, you can also help you be a little bit pickier about the job in your field that you do end up taking because you won’t be as worried about your financial situation. This will allow you to be more comfortable negotiating your salary and finding a place that will give you the best pay.
Set Up Your Own Bank Account
One of the first steps towards financial independence that you can take out of college is starting your own bank account. By doing this, you will be able to keep your finances separate from the bank account that you were most likely sharing with your parents. While there’s no shame in sharing an account with your parents, having full control over your finances can provide a valuable learning experience, and the earlier you start learning, the more life-long financial skills you will be able to form for yourself.
If you’re not sure where to start on your first bank-account, consider looking into banking options with no maintenance fees. This will allow you to maximize your savings potential and keep your money for yourself. With compound growth and no-fees, you will soon find your savings account growing rapidly, giving you the option to build wealth at a young age. You should also talk to your parents about why they chose the bank that they did and see what you can do to help you get started on moving your funds into your personal account.
Create a Budget
While you’re still working part-time, or looking for new work entirely, you are going to need to be able to afford your monthly expenses. While your expenses may start low after college (especially if you’re still living at home) you should plan ahead for when your expenses aren’t low. This is going to become particularly important when your student loan bills start coming in.
One way to manage your expenses is by setting up a monthly budget to properly allocate your income. If you’re working a part-time job, this can be done by tracking your expenses against your take-home pay, so that you never wind up short on cash when you need to pay bills. The same principle applies if you’re looking for work and still rely on some money from your parents to help cover your expenses. However, if this is the case, you should try to reduce your expenses as much as possible until you acquire a full or part-time job, as this is not going to be reliable as a long-term source of income.
Get a Head Start on Your Student Loans
In the months after graduation, student loans are probably going to be a huge source of financial anxiety scratching at the back of your mind. Many times they can rack up to tens of thousands to even hundreds of thousands of dollars, leaving many students wondering if they’re going to be able to pay them off in a timely manner, so that they aren’t held down by debt later in life. Even though they may be causing you anxiety best time to start paying off your student loans is right around the time you graduate.
Once you start working a part-time or full-time job out of college, you will also find that depending on your living situation, such as with parents or roommates, your expenses are going to be minimal. This means that now is the best time to start paying off your debt because you will be able to pay off more than the minimum monthly payments and quickly eliminate both the interest and the payment itself. Look into loan payment strategies as well, such as the snowball method, in order to make the process go by as soon as possible.
Save What You Can
Finally, if you are able to save money at the end of each month after all of your expenses have been covered, it’s time to start looking into creating an emergency fund for yourself. The purpose of an emergency fund is to have enough money put aside for a short-term emergency, such as a car breaking down, or a long-term emergency like job loss. The earlier you get started on your emergency fund, the more you’ll see it grow with compound interest.
This emergency fund will be great to have, as it will give you something to fall back on while you look for full-time work, and when you do get a job in your field, you will still be able to use it if anything should happen that requires an expensive payment. Most people do end up needing to use it at some point in their lives, especially if they find themselves between jobs. However, even if you don’t end up using it, it’s better to have it ready than not.
Whether you’ve just started working your first job out of college or you’re still trying to decide where you want your life to take you, there are lots of great options available to help you be financially ready for the future. At the end of the day, however, it’s important to remember that you’re still young, and have a lot of people, such as friends and family, who will be able to help you in this transitional period of your life.